A Peoria-based startup aims to help everyday consumers make smarter investment decisions by providing algorithmic solutions usually available only to Wall Street.
The collapse of the real estate bubble, which peaked in 2006 and 2007, caused the values of mortgage-backed securities to plummet. In turn, this caused a financial crisis and pushed the world to the brink of a depression.
The crisis wiped out 50 to 70 percent of the retirement savings in 401(k)s and mutual funds of many hard-working Americans. A lot of these investors lost faith in the market and pulled their money out of mutual funds and individual stocks. Others were left wondering whether there was a more effective method of identifying securities. At the time, there were no consumer-based interactive tools—something that Stookle.com aims to change.
The market rebounded from its bottom in March of 2009, and institutional investors profited, but many individual investors were left on the sidelines. Most institutional investors and traders have a wide gamut of tools to analyze the market, but individual investors like you and me don’t have the access or money to purchase such tools.
Algorithmic Trading Solutions
An increasing number of hedge funds are using algorithmic trading solutions, which are very complex computer programs, to trade stocks. Most are automated, rule-based systems that continuously monitor and analyze the data, and decide the price, quantity and appropriate time to buy or sell. As profits soar, more and more hedge funds are adapting algorithmic trading strategies.
Are you aware that as of 2009, high-frequency trading firms account for 73 percent of all U.S. equity trading volume? The tools used by these institutions are getting far more sophisticated, but we individual investors still rely on naïve tools and basic screeners to analyze the market. Most of our time is spent following analyst recommendations and reading articles on various financial newspapers and blogs. By the time analysts upgrade or downgrade securities, they often would have finished their runs and wouldn’t be of much help. Analyzing a market of over 10,000 securities is pretty time-consuming, and it only gets more difficult for individual investors, as many have full-time jobs, families and other activities.
As the founder of Stookle, I share the same passion for investing as many of you. I began investing in the stock market after earning my first paycheck, and spent a lot of time reading books and articles, analyzing balance sheets and following analyst recommendations and reports—but was barely beating the market. In one case, I lost 30 percent of my portfolio, even after spending more than 20 hours a week analyzing securities. After detailed analysis, I began to realize that stocks with certain price/volume trends were performing far better than the market, so I looked for mathematical tools, or quants, to screen the market for trends. I was surprised to find that no tools were available for individual investors to take advantage of the price and volume movements of securities.
The Birth of Stookle
With a background in artificial intelligence and machine-learning algorithms, and years of experience in stock market analytics, I began working on techniques to analyze the market. After many sleepless nights, I developed financial algorithms to analyze the stock market and spent years optimizing them. With continued trading success using these algorithms, I decided to take the next step and make it available to the consumer marketplace. I formed a team of experts, streamlined the algorithms and launched the first interactive, financial algorithms-based website for individual investors, with a free sign-up option. Main Street investors are being left behind, and Stookle intends to fill the void and add value with our innovative analytics solutions.
Stookle.com was born out of frustration and the lack of smart tools in the marketplace for Main Street investors like you and me. The platform employs an automated algorithmic approach that uses a combination of multi-dimensional, multivariate processing techniques blended with a myriad of technical indicators to detect trends in the market. While the algorithms and computations are complex, the website was designed with the novice investor in mind. It has options where users can select among the best-performing bull, bear or turnaround trends over various timelines and sectors. Standard (free) users can analyze S&P 500 stocks for basic trends with just an email ID. Premium users have access to seven additional trends and can analyze securities in the S&P 500, NYSE and ETFs for a nominal, flat monthly fee.
Trends and Strategies
Based on rigorous market analysis over the last decade, Stookle Trends was formulated. Trend following is an approach which seeks to identify a trend in the price for a certain security, trade with that trend, and exit when the trend appears to be failing. A contrarian approach involves entering a position against the current trend, having determined through indirect means that it may reverse or undergo a correction.
Stookle’s services benefit both technical traders and value investors. Technical traders can easily identify trends out of thousands of stocks and either follow them or take a contrarian approach based on market conditions. Fundamental investors can easily find the securities that have been most beaten down in a certain period by looking at the bear trends, and they can even find when these securities start turning around.
Stookle.com complements these trends with strategies, or sets of rules created around the formation of trends. Strategies demonstrate what actions a trader would typically take when a particular trend is identified and are determined for each index.
Stookle.com is not a registered investment advisor and does not provide investment advice. Rather, we provide usable market data analytics that will help investors make more informed decisions and hopefully give individual investors another reason to start investing in the market. My hope is to provide algorithmic solutions that are usually available to Wall Street to the everyday consumers of Main Street. iBi